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VIX Index Goes Nowhere | Cheap Puts to Hedge? |Cheaper to Rent Than Buy? | Markets During Presidential Election Years


By Derek Moore

Show Summary:

Derek Moore and Jay Pestrichelli join up to discuss an unchanged VIX and VVIX index. Was our trading platform screen broken? Whether the VIX and VVIX Index is a coiled spring as they are both in compression mode of late. Then, they explore new data that shows the cost to buy a home vs rent is really high meaning its very costly to buy vs rent right now. Did the Fed cause this? Jay and Derek also explore how cheap 1 year out puts are on the S&P 500 Index right now. Does no one want protection? Finally, they dip their toes into the all to soon 2024 presidential election looking at data around how markets do during election years. Does it even matter if it’s a Republican or Democrat?

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Topics Include:

  • The VIX Index and the VVIX Index both closed unchanged on Wednesday this week
  • Both VIX and VVIX are showing signs of compression in their standard deviations of late
  • What smaller ranges over a period mean for the VIX and markets with regard to expected moves
  • Not since the pre-Great Financial crisis has buying a home been more expensive than renting
  • How now one ever compares the interest paid in a mortgage payment to rental payments
  • Did the Federal Reserve cause rent inflation by freezing the housing market creating demand?
  • The 1-year out at-the-money-puts are a cheap hedge right now, does anyone want hedged?
  • How everyone wants to be hedged when markets are crashing but not when its cheap
  • Why buying but hedging makes sense for the long haul.
  • How do markets do in the 4th year of a presidential cycle election year?
  • Market returns during presidential elections when democrats vs republicans get elected

Mentioned in this Episode:

Dave Ramsey Wrong? | Huge VIX Options Bets | S&P 500 Seasonality | When Does Government Debt Become a Problem? 

Total compounded annualized growth rate S&P 500 index by decade 

Probability of Recession? | Explaining How US Treasury Bond Auctions Work | S&P 500 Index Member Changes | Option Premium Intrinsic vs. Extrinsic 

Stock Market Returns after First Rate Cut 

Option Selling ETFs Boom | Probability of Future Fed Moves | Bad News is Good News on Employment 

0DTE Options Analysis| Inflation Coming Back? | Strong US Dollar Impact 

Jay Pestrichelli’s book Buy and Hedge 

Derek’s new book on public speaking Effortless Public Speaking 

Derek Moore’s book Broken Pie Chart